site.btaUPDATED Defence Industry Employment Declines in 2021, Trend Expected to Reverse in 2022 - Expert

At the end of 2021, a total of 23,646 people were directly employed in the defence industry sector, while at the end of 2020 their number was 24,085, down by 439. It is evident that direct employment is declining despite the 24 new companies applying for the first time for documents under the Defence-Related Products and Dual-Use Items and Technologies Export Control Act (DRPDUITECA), Dimitar Buchkov, Secretary of the Interdepartmental Council for Defence Industry and Security of Supply at the Council of Ministers, said during a meeting of the Parliamentary Committee on Economic Policy and Innovation on Wednesday. He presented a Report on the implementation of the DRPDUITECA by the Inter-Ministerial Council in 2021. The Committee approved the Report. 

Benko Lambev, Chief Specialist at the Inter-Ministerial Council Secretariat, said that the negative trend is expected to reverse in 2022. With the new environment that was created after the beginning of the war in Ukraine on February 24, defence industry enterprises are massively looking for workers and announcing openings for their recruitment, and by the end of 2022 the picture will be different, the expert said.

Buchkov informed the Committee members that the main decline in the number of employees occurred in manufacturing enterprises, while the composition of commercial enterprises remained more or less constant. The decreasing numbers come from the dismissal of specialists when there are no trained personnel to come in their place, he added. Buchkov expressed his opinion that the reason for this negative trend is the education system, referring to the lack of vocational schools that prepare specialists for this industry. There is a deficiency of personnel in VMZ, "Lyaskovets", "Arsenal", and "Dunarit". An increase in staff is reported only in security company MOBA of the Ministry of Defence, Lambev said. 

The Inter-ministerial Council had 9 meetings in 2021, 3 of them non-conference meetings under 3 governments in office (1 regular and 2 caretaker), at which it considered the applications of 153 companies for the issuance of licenses and registration certificates, and for changes in circumstances that occurred after their issuance, Buchkov informed the MPs. 

The number of applications examined increased from 99 in 2008 to 153 in 2021, he added. At the meetings held last year, after examining 153 applications, the Inter-Ministerial Council issued the following documents: 24 one-year licences for the export and import of DRP; 71 five-year licences for the export and import of DRP; 2 five-year licences for the transportation of DRP between two third countries without entering the territory of the Republic of Bulgaria; 65 registration certificates for the transfer of DRP; 39 registration certificates for brokerage activities with DRP; 2 modifications of one-year licenses for export and import of DRP; 8 modifications of five-year licenses for export and import of DRP; 1 modification of five-year license for transportation of DRP between two third countries without entering the territory of Bulgaria; 11 modifications of certificates of registration for transfer of DRP; 3 modifications of certificates of registration for brokerage activities with DRP, the expert said. 

In 2021, the Inter-Ministerial Council has taken note of 26 notifications of change of circumstances under which documents were issued under the provisions of the DRPDUITECA, denied the issuance of one one-year license for export and import of DRP. It has terminated one licence for the export and import of DRP, one certificate of registration for the transfer of DRP and one DRP recipient certificate at the request of the holders, Buchkov said. The termination of the recipient certificate was at the request of Energia JSC Targovishte due to the foreign investor ceasing operations and outsourcing production to another country, the report said.

There is a trend towards an increase in the number of documents held by traders on export control of DRP, from 202 at the end of 2007 to 666 at the end of 2021, Buchkov said. The number of licensed and registered companies is also increasing from 191 at the end of 2014 to 290 at the end of 2021. As of the end of 2021, 13 companies have not submitted applications to continue foreign trade activities in DRP, the expert added. Fees amounting to BGN 154,195 have been collected for the issued documents.